Stock price reactions to ESG news: the role of ESG ratings and disagreement

Serafeim, George; Yoon, Aaron

doi:10.1007/s11142-022-09675-3

Cited by 178 publications

(60 citation statements)

References 54 publications

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“…Investors prefer enterprises with high ESG scores (Wang and Yang, 2022). Moreover, Serafeim and Yoon (2022) find that ESG score can predict future news, and investors are less sensitive to negative news from high-quality ESG companies, reducing market reaction and stock price volatility. For government departments, the state has introduced a series of preferential and punishment policies to call on and encourage ESG behaviors.…”

Section: Esg Performance and Corporate Value Based On The Stakeholder...mentioning

confidence: 95%

ESG performance and corporate value: Analysis from the stakeholders’ perspective

Zheng

Wang

Sun

et al. 2022

Front. Environ. Sci.

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Based on the panel data of China’s A-share non-financial listed enterprises from 2011 to 2020, we empirically explore whether EGS performance can significantly promote corporate value and how to promote it, from the stakeholders’ perspective. We find that: 1) ESG performance significantly improves corporate value. 2) Both media attention and analyst coverage play an intermediary role in the impact of ESG performance on corporate value. 3) Further analysis of the single dimension of ESG illustrates that Environmental (E) and Social (S) have a positive impact on corporate value, but the effect size of Social (S) is smaller, and there is no evidence for a significant relationship between Governance (G) and corporate value. 4) The heterogeneity analysis shows that ESG performance of non-heavily polluting enterprises has a significant positive effect on corporate value, but not on heavily polluting enterprises. Meanwhile, ESG performance of enterprises with a low percentage of institutional investor ownership has a significant positive effect on corporate value, but not with a high percentage. Overall, our study shows that high-quality ESG performance triggers the attention of media and analysts, which in turn promotes corporate value by raising stakeholder pressure. We also analyze the possible causes of heterogeneous results from the perspective of stakeholders, and put forward reasonable suggestions to promote ESG performance and corporate value, as well as protect the interests of stakeholders.

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Section: Esg Performance and Corporate Value Based On The Stakeholder...mentioning

confidence: 95%

ESG performance and corporate value: Analysis from the stakeholders’ perspective

Zheng

Wang

Sun

et al. 2022

Front. Environ. Sci.

View full text Add to dashboard Cite

show abstract

“…Instead, our predictions rely on the premise that market participants perceive the CSR ratings as useful benchmarks. Consistent with this premise,Serafeim and Yoon (2021) andHartzmark and Sussman (2019) show that markets react to summary measures of CSR performance.A. Darendeli, P. Fiechter, J.-M. Hitz, N. Lehmann Journal of Accounting and Economics 74 (2022) 101525…”

mentioning

confidence: 60%

The Role of Corporate Social Responsibility (CSR) Information in Supply-Chain Contracting: Evidence from the Expansion of CSR Rating Coverage

et al. 2021

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“…Their results call for future attention to how the data underlying ESG ratings are generated. Serafeim and Yoon ( 2022 ) investigated market reaction to ESG news and consensus on the rating of different rating agencies. They found that in the presence of high disagreement between raters, the relation between news and market reactions weakens.…”

Section: Literature Reviewmentioning

confidence: 99%

The impact of ESG risks on corporate value

Cohen

2023

Rev Quant Finan Acc

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The following research has analyzed the linkage between ESG sustainability scores to the firm’s valuations. We provide evidence that the total ESG score is diminishing for the S & P500 firms from 2019 till 2021 meaning that these risks factors take their rightful place in the global economy. We find that the impact of environmental risks on the firm’s valuation is not significant enough. Moreover, we found that while the “Beta” risk factor of the S & P500 carries environmental risks, it does not hold such risks for Nasdaq100 stocks, and therefore, we recommend strengthening the environmental education to investors and other financial industry participants. This research also provides evidence that social risk impact negatively the simple excess return for both the S & P500 and nasdaq100 stocks indicating that social issues must be mitigated in order to maximize a firm value. Moreover, we find that the traditional CAPM “Beta” carries environmental and corporate governance risks for the S & P500 stocks. However, it totally neglects social risks and therefore it can not be used in modern ages where social risk are very important to all participants of the global economic environment.

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Stock price reactions to ESG news: the role of ESG ratings and disagreement

Cited by 178 publications

References 54 publications

ESG performance and corporate value: Analysis from the stakeholders’ perspective

ESG performance and corporate value: Analysis from the stakeholders’ perspective

The Role of Corporate Social Responsibility (CSR) Information in Supply-Chain Contracting: Evidence from the Expansion of CSR Rating Coverage

The impact of ESG risks on corporate value

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